Yet another stockbroker

This week the final numbers on the US trade deficit was coming out and was landing on 763 Billon dollars, the number speaks for itself. The fact is though that the numbers can help the US growth in the short run cause US products are getting cheaper and foreign products more expensive to purchase for the American people.

The housing market is still an important issue and the FED chief Ben Bernanke have been indicating that he sees some stabilization and this is and will be an subject to keep on looking into further on.

Europe and Japan is two regions that analyst hopes will take on some of the growth that US is loosing. I been mentioned Japan as an dark horse before and this week there where some figures to confirm that when the growth numbers for the fourth quarter was 4,8%, expected 3,8%.

Global Stockmarket

This part will consider regions as the US, Europe, the Nordic region, Eastern Europe, South America and Asia. A strong global growth have been moving almost all markets to good result for 2006 and below is quick overview of areas for the 2007.

Another positive week for the global market all over between 2-4% with Japan worth mentioning after strong growth figures in the last quarter 2006 helping

Currency

Not much movement for currencies of interest for this week, most emerging currencies have kept on to strengthen up against the Euro and the Dollar.

Weekly Marketletter (7) 2007-02-12

Goldilock seems to be a fact…or at least everyone hopes so. Speculations the last week have considered if the slowing US growth is a “mid-cycle correction” cycle where the stockmarket are driving forward during the slow down. The risk is of course that the slow down is getting to slow and move the economy into a recession.

The market is strong and are keep on moving up though there will be a bounce, it always comes, it is just a matter of time. There is difficult to foresee what will take the market down but speculations if the slow down is healthy or if it is a coming recession might be worth putting some money on.

The Michigan Confidence index was helping the market while coming in strongest in two years time which will help the market when it comes to consuming in the next quarter.

Global Stockmarket

This part will consider regions as the US, Europe, the Nordic region, Eastern Europe, South America and Asia. A strong global growth have been moving almost all markets to good result for 2006 and below is quick weekly overview of selected areas in 2007.

This weeks winner was China and the Eastern Europe region overall with an move between 2-4%.

Currency

The short interest in the US has been coming up in the last 12 month but seems at this point to take a pause. The signals from FED indicate that inflation are under control. Considering that the expectations on interest influence where money goes the bounce in the dollar we been seeing the first month of 2007 is just short term strength and the dollar will keep on coming off.

January is to an end and the stock market is keeping on moving up, why is that?

Mainly there is on the background of the surprisingly strong GDP growth in the fourth quarter where US as an example had a GDP growth of 3,5%, expected 3,0%. The strong growth combined with a low core inflation of 2,1%, close to FED:s goal of 2%. Strong growth combined with a low inflation, the market loves that. What worries is that the growth is holding up by private consumption, the company investments needs to come up to hold up the economic growth.

Housing market is another important issue has lately been moving on the downside in the US but is expecting to stabilize and some positivism has been showing.

The FED kept the interest on 5,25% on there meeting on the 31 January and was giving a brighter view of the economy growth and inflation. The ISM-Index though indicating that the economy will slow down as expected in the next couple of month.

Global Stockmarket

This part will consider regions as the US, Europe, the Nordic region, Eastern Europe, South America and Asia. A strong global growth have been moving almost all markets to good result for 2006 and below is quick overview of areas for the 2007.

Another strong week for the global market with Turkey, Singapore and Germany in the lead. If we take a look on the one month developments Eastern Europe followed by emerging markets as India and Latin America is in the lead. Considering specific segment New Energy has been sailing up as a winner in the first month of 2007.

The speculative trading on raw materials as Copper and Zinc has resulting in prices in a historical volatile price range. The prices have at this stage coming back but there seems to be temporarily when the shortage of raw materials, to keep for example China and other emerging regions going, just won’t go away.

Currency

The short interest in the US has been coming up in the last 12 month but seems at this point to take a pause. The signals from FED indicate that inflation are under control. Considering that the expectations on interest influence where money goes the bounce in the dollar we been seeing the first month of 2007 is just short term strength and the dollar will keep on coming off.

The report season has been starting and it’s too early to tell but it looks in general pretty good so far.

Considering a US recession or not is a topic for the beginning of 2007 and so far it doesn’t look very likeable. But I think that the growth in US is coming back a bit but that will not affect the global growth as much as the weakening dollar. The US is important for the global economy but not as much as before though the emerging regions in the world are today standing for more than 50% of the global economy, China is closing in on Germany as the third biggest economy which is impressive and are day by day changing the map for the importance of the US growth and economy.

“This time is different” have been heard before considering Japan but I am starting to think it really can be an interesting case for 2007, the “yen carry trade”* seems to be a never ending story though. I will follow up on Japan in the forthcoming market updates though it is not on my “market hotlist” at this stage.

China is just keep on growing in an impressive rate. The fourth quarter GDP growth of 10,4% connected to an inflation of 1,5% for 2006 speaks for it self. Investments in China are booming with almost a 25% growth for 2006. Though the charts looks pretty steep not many things seems to stop this machine.

Global Stockmarket

This part will consider regions as the US, Europe, the Nordic region, Eastern Europe, South America and Asia. A strong global growth have been moving almost all markets to good result for 2006 and below is quick overview of areas for the 2007.

In general market has been ticking up this week with an exception for China where the strong GDP numbers scared the market for pushing the inflation up. Biotech and Health are industry segment that been up in the beginning of 2007 as well as Europe and the Nordic region that been moving up the expectation for the GDP growth for 2007.

Currency

Let the trend be your friend and keep on going short dollar. Not much to comment on for this week movement.

* Investors lending Yen and buys US Bonds with higher interest than they have to pay in interest in Japan.

It seems that the US at this point is getting its soft landing which is very good for the global market. The core inflation is still on a manageable or even a low level. Important considering inflation are expectations and the expectations are that the inflation will come back and that will help the market on the long side as long as the GDP not are strengthen up more than expected.

In the end of January Federal Reserve have there next meeting and as I been indicating earlier there seems that the FED will wait to cut interest till they know more about the GDP growth.

The jobless recovery that been something that been a fact for the last couples of years seems to be changing as well and is something that indicating to be changing when reports points out that it is harder for companies to find people.

The economy seems to be in the stage where company investments should take the global growth further. The companies have after 2000 till 2002 been a bit burned and therefore not investing as they should, though this seems to be changing and effects should be visible ahead.

The US deficit is another question that Ben Bernanke as well as Alan Greenspan a couple of times tried to get up on the agenda. The effect of the speech was only pressure back the market for a short while before it bounced back.

Another a bit surprising thing for the week was that Japan did not moved up there interest from 0.25% to 0.5%, but there seems to be just a matter of time till that is being done.

Global Stockmarket

This part will consider regions as the US, Europe, the Nordic region, Eastern Europe, South America and Asia. A strong global growth have been moving almost all markets to good result for 2006 and below is quick overview of areas for the 2007.

China, Europe and Eastern Europe where foremost Turkey been strong are markets that started of well in the beginning of 2007. I think it is among this we will find the winners for 2007.

Currency

Let the trend be your friend and keep on going short dollar. George W Bush doesn’t seem to have any interest to strengthen the dollar and this will not change what ever Ben Bernanke or other people say about the deficit.

As a indicated in the last market letter there was only a matter of time until the bull is starting to show its face again still if Asia and foremost China had a weak week.

Global Stockmarket

This part will consider regions as the US, Europe, the Nordic region, Eastern Europe, South America and Asia.

Europe is one of my strongest cards for 2007 and the beginning has been reasonable good considering the risk. Raw materials and foremost oil have not been a fun reading for the investors that been taking positions towards raw material, still there are shortage of raw materials and that would theoretical holding up the prices for 2007.

Eastern Europe seems day by day to be a winner for 2007, countries as Romania and Bulgaria are examples of countries that expecting to have a strong 2007 and will as well get help by being close to moving in to the European Union.

Currency

This part will foremost consider an overview of the trends for the dollar against the Euro and emerging market currencies. I have during 2006 been arguing to go short dollar and I think at this point that 2007 will be another year when it is possible to make money going short the dollar.

There seems that the FED is holding back and will not cut the interest as soon as expected. That will probably not help the dollar for very long and especially not considering emerging market currencies. Towards Eastern European the dollar have after the last weeks bounce back coming of again and is still in a weak.

The first week of 2007 was mostly a move sideways for the global market. After a strong ending of 2006 the market took a short pause but there seems to be a good idea to take position on the long time cause I think the market will probably keep on moving until the reports I starting coming in.

Global Stockmarket

The Nordic region, Europe, South America (focus on Brazil), Eastern Europe (Turkey excluded) and China is still my number one regions for 2007.

Not much have been moving in week number one though there could been seen that some money moving in to more defensive sectors. Raw materials have also had a weak start and it is mostly the warm weather that put some pressure on the oil.

The only thing that worries me is that it is not much to be worried for. The growth in most part of the world have higher numbers in the GDP than historical been difficult to maintain but it seems that China makes the global economy strengthen with maintaining low inflation.

Currency

The dollar have starting the year of 2007 to bounce back a bit from being in a weak trend for quite some time. If the FED decides to cut the interest the weak trend will probably be intact but if the inflation is coming back as well as the growth the FED will probably wait longer than the financial market thinks today to cut the rate which might holding up the dollar in the short run.

Will 2007 be another year with a global upside for the economic growth and the financial market?

If the US gets its soft landing and Asia keeps on moving it will. Europe will most likely take on some of the pushing from the US in 2007.

The market letter of 2007 will consider the global stockmarket on a macroeconomic level and currencies that have become a subject for even “non investors” which is somewhat a new phenomenon.

The landing in May 2006 was hard and a period of possibilities for short term investors to make good money and long term investors to just hold on and try to focus on the underlying trend and economic growth of the global economy. We are in the beginning of 2007 back in the global uptrend we been in for almost 4 years.

Global Stockmarket

This part will consider regions as the US, Europe, the Nordic region, Eastern Europe, South America and Asia. A strong global growth have been moving almost all markets to good result for 2006 and below is quick overview of areas for the 2007.

The Nordic region, Europe, South America (focus on Brazil), Eastern Europe (Turkey excluded) and China have strong momentum in the beginning of 2007. India is still showing great strength but the valuation is getting a bit provocative. When in comes to wild cards in the 2007 South Korea is a strong candidate considering valuation and Turkey might be a winner after a tough 2006.

Currency

This part will foremost consider an overview of the trends for the dollar against the Euro and emerging market currencies. I have during 2006 been arguing to go short dollar and I think at this point that 2007 will be another year when it is possible to make money going short the dollar.

The US trade deficit have for years been one of the strongest arguments for the dollar to come off. The main focus for the dollar to keep on coming off in the year 2007 is mainly the strength of the economic growth and the interest cycle in most other parts of the world is better off than in the US.

The strong growth in the emerging markets and the “healthy” weakness in the US growth are going to keep on pressure the dollar. The FED have during 2006 fighting the weak dollar by moving the interest to 5,25%, both growth data and inflation indicates that the phase of increasing the interest is close to an end, in 2007 the dollar will not have that help from the FED.

The expectations for the interest in the European Union is that ECB will gradually moving up from 3,50% and several emerging markets is as well expected to increase the interest and that will theoretical move money from the US in to these currencies that are in the beginning of a interest increasing cycle. There is a similar trend when it comes to Japan, the second biggest stockmarket in the world, where Bank of Japan for the first time in 6 years increased the interest in mid 2006.

The trend in 2007, when it comes to growth, is that Europe and most emerging markets is expecting to be stronger than in the US. The productivity in the US have the last couple of years been better than in other parts of the world but 2007 there is expectations that Europe , as an example, will be strong when it comes to productivity.

Another aspect when it comes to currency is what will happen if China will start selling dollar, this is an area that might be discussed later on during 2007. There is as well in the cards that China will strengthen the currency minimum 5%, that will not help the dollar.

To sum up this part there might be still interesting to go short dollar in 2007.

A stock market update with focus on giving a broader macro perspective view on interesting regions, and specific industry segment. Included will be comments of the weekly stats of interest as well as development of a selection of currencies.